US: It was a week full of hustle for DigitalGlobe and MDA. After the announcement of acquisition (Read the Full Analysis) and the fourth quarter results by MDA, DigitalGlobe Inc. (DGI) also reported its financial results for the full year and fourth quarter that ended December 31, 2016.
The satellite imaging company on February 24, 2017 posted revenue of $192.7 million in the period. For the year, the company reported profit of $26.5 million, or 34 cents per share. Revenue was reported as $725.4 million.
DigitalGlobe expects full-year revenue in the range of $840 million to $865 million. DigitalGlobe shares have climbed 19 percent since the beginning of the year. The stock has more than doubled in the last 12 months.
It also reported a fourth-quarter loss of $9.3 million, after reporting a profit in the same period a year earlier. On a per-share basis, the Colorado-based company said it had a loss of 17 cents. Earnings, adjusted to extinguish debt, came to 19 cents per share.
Jeffrey R. Tarr, CEO, DigitalGlobe said, “We wrapped up a solid year on a high note with our successful launch of WorldView-4 and the completion of the Radiant Group transaction (Read the Full Analysis). Our improved results reflect solid execution against our strategy for shareowner value creation and position us well for 2017. We look forward to continued profitable growth as we expand our International Defense and Intelligence business with assured access to our newest high resolution satellite, develop new commercial use cases, expand our rapidly growing geospatial big data analytics platform, and realize the full potential of our services business with the addition of Radiant. Furthermore, we are pleased to have reached an agreement to combine with MDA as we separately disclosed today.”
Full Year Financial Summary:
- Grew U.S. Government revenue by 3.3% driven by the addition of The Radiant Group and an increase in value-added services revenue.
- Grew Diversified Commercial revenue by 3.3% due to increased demand for Global Basemap product suite and strength in other defense and intelligence sales.
- Grew net income 13.7% to $26.5 million, or $0.34 per diluted share.
- Expanded net income margin 40 bps to 3.7%.
- Grew adjusted EBITDA 7.6% to $382.7 million.
- Expanded adjusted EBITDA margin 220 bps to 52.8%.
- Net cash flows from operations decreased 8.5% to $301.6 million.
- Free cash flow declined 34.1% to $109.6 million due to increased capital expenditures, including launch insurance, for WorldView-4, and one time additional payments from our largest customer in the prior year.
Fourth Quarter Financial Summary:
- Grew total revenue 6.1% due to the addition of The Radiant Group and growth in value-added services revenue.
- Net income (loss) decreased to $(9.3) million, or ($0.17) per diluted share, compared to $10.6 million, or $0.13 per diluted share, in the prior year, primarily as a result of the $35.7 million loss on extinguishment of debt recognized in relation to our debt refinancing in 2016.
- Net income margin declined 1060 bps to (4.8%).
- Adjusted EBITDA decreased 7.8% to $94.4 million.
- Adjusted EBITDA margin declined 740 bps to 49.0% primarily due to Radiant Group transaction.
- Net cash flows from operations decreased 5.7% to $86.9 million.
- Increased free cash flow 70.2% to $49.7 million due to lower capital expenditures following the launch of WorldView-4.
- Successfully launched WorldView-4 on November 11, 2016 and achieved commercial operations with first DAP customer in February.
- Completed the combination with Radiant, a leading provider of geospatial solutions to the U.S. intelligence community.
- Signed Esri and Harris as ecosystem partners, who join additional development partners and customers including Facebook, Orbital Insight, SpaceKnow, PSMA, Lockheed Martin and PrecisionHawk, among others.
- Refinanced outstanding debt by entering into a new Credit Facility in December 2016 and extinguishing our $600.0 million aggregate principal amount of outstanding 5.25% Senior Notes through a tender offer and subsequent redemption completed in January 2017.
- Completed share repurchase program for a total of 15,365,411 shares at an average price of $21.82 per share, for a total of $335.3 million.